1.Deltones, a manufacturer of computer peripherals, has excess capacity. The company's Alabama plant has the following per-unit cost structure for item no. 89:

Variable manufacturing= $50

Fixed manufacturing=35

Variable selling= 6

Fixed selling= 9

Traceable fixed administrative= 4

Allocated administrative= 2

The traceable fixed administrative cost was incurred at the Alabama plant; in contrast, the allocated administrative cost represents a "fair share" of Deltones' corporate overhead. Alabama has been presented with a special order of 5,300 units of item no. 89 on which no selling cost will be incurred. The proper relevant cost in deciding whether to accept this special order would be: 50

Multiple Choice Answer:

• $91.
• None of the answers is correct.
• $89.
• $106.
• $50.

2.Elkhorn, Inc., which has excess capacity, received a special order for 4,100 units at a price of $16 per unit. Currently, production and sales are anticipated to be 14,000 units without considering the special order. Budget information for the current year follows.

Sales= $252,000

Less: Cost of Goods Sold=196,000

Gross Margin= $56,000

Cost of goods sold includes $28,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:increase by 16400

Multiple Choice Answer:

• decrease by $16,400.
• decrease by $8,200.
• increase by $16,400.
• increase by $8,200
• None of the answers is correct.

3.Allison is contemplating a job offer with an advertising agency where she will make $68,000 in her first year of employment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $52,000. If Allison decides to work with her father, the opportunity cost would be:68000

Multiple Choice answers:

$120,000.

irrelevant in deciding which job offer to accept.

$52,000.

$68,000.

$0.

4.The Boot Department at the Omaha Department Store is being considered for closure. The following information relates to boot activity:

Sales revenue=$363,000

Variable costs:

Cost of goods sold=290,000

Sales commissions=32,000

Fixed operating costs=93,000

If 80% of the fixed operating costs are avoidable, should the Boot Department be closed?

Multiple Choice answer:

• No, Omaha would be worse off by $22,400.
• No, Omaha would be worse off by $41,000.
• Yes, Omaha would be better off by $52,000.
• None of the answers is correct.
• Yes, Omaha would be better off by $33,400.